Proxy Statement (Form DEF 14A)
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
| Filed by the Registrant | ☒ |
| Filed by a Party other than the Registrant | ☐ |
Check the appropriate box:
| ☐ | Preliminary Proxy Statement |
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
| ☒ | Definitive Proxy Statement |
| ☐ | Definitive Additional Materials |
| ☐ | Soliciting Material under §240.14a-12 |
(
(
Payment of Filing Fee (Check all boxes that apply):
| ☒ | No fee required |
| ☐ | Fee paid previously with preliminary materials. |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a- 6(i)(1) and 0-11 |
Dear Stockholder:
You are cordially invited to attend
The 2025 Annual Meeting will be a completely virtual meeting of stockholders, which will be conducted via live webcast. You will be able to attend the 2025 Annual Meeting online, vote and submit your questions during the 2025 Annual Meeting by visiting www.virtualshareholdermeeting.com/MAMO2025.
We are pleased to utilize the virtual stockholder meeting technology to provide ready access and cost savings for our stockholders and the company. The virtual meeting format allows attendance from any location in the world.
Even if you are planning on attending the 2025 Annual Meeting online, please promptly submit your proxy vote by Internet, telephone, or, if you received a printed form of proxy in the mail, by completing, dating, signing and returning the enclosed proxy, so your shares will be represented at the 2025 Annual Meeting. Instructions on voting your shares are on the proxy card you received for the 2025 Annual Meeting. Internet voting facilities for stockholders of record will be available 24 hours a day and will close at
The Company has enclosed a copy of the proxy statement, the proxy card and the Company's annual report to stockholders for the year ended
Thank you for your continued support of, and interest in,
| Sincerely, | |
| /s/ |
|
| Chief Executive Officer and Chairman | |
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE 2025 ANNUAL MEETING WHETHER OR NOT YOU ATTEND ONLINE, PLEASE CAST YOUR VOTE AS INSTRUCTED IN THE PROXY CARD AS PROMPTLY AS POSSIBLE. YOUR PROXY, GIVEN BY VOTING PRIOR TO THE 2025 ANNUAL MEETING, MAY BE REVOKED PRIOR TO ITS EXERCISE BY ENTERING A NEW VOTE OVER THE INTERNET, FILING WITH OUR CORPORATE SECRETARY PRIOR TO THE 2025 ANNUAL MEETING A WRITTEN NOTICE OF REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE, OR BY ATTENDING THE 2025 ANNUAL MEETING ONLINE AND VOTING ONLINE.
IF YOU HAVE ALREADY VOTED OR DELIVERED YOUR PROXY FOR THE 2025 ANNUAL MEETING, YOUR VOTE WILL BE COUNTED, AND YOU DO NOT HAVE TO VOTE YOUR SHARES AGAIN. IF YOU WISH TO CHANGE YOUR VOTE, YOU SHOULD REVOTE YOUR SHARES.
IF YOU HAVE CHOSEN TO RECEIVE PAPER COPIES OF YOUR PROXY MATERIALS, INCLUDING THE PROXY CARD, PLEASE COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE RETURN ENVELOPE PROVIDED.
ANY STOCKHOLDER ATTENDING THE 2025 ANNUAL MEETING ONLINE MAY VOTE EVEN IF HE OR SHE HAS RETURNED A PROXY. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE, YOU MUST FIRST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
(877) 881-6376
NOTICE OF 2025 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
To our Stockholders:
Notice (this "Notice") is hereby given that the 2025 Annual Meeting of Stockholders (the "2025 Annual Meeting") of
| (1) | to elect five (5) directors to serve terms in accordance with the Company's bylaws (the "Bylaws"); | |
| (2) | to ratify the appointment of |
|
| (3) | to amend the 2024 Stock Incentive Plan; and | |
| (4) | to consider and vote upon any other business that may properly come before the Annual Meeting or any adjournments or postponements thereof. |
The Board unanimously recommends a vote "FOR" the approval of each of the Director Nominees in Proposal 1, and a vote "FOR" each of Proposal 2 and Proposal 3.
Pursuant to our Bylaws, our Board has fixed the close of business on
The Company has enclosed a copy of the proxy statement, the proxy card and the Company's annual report to stockholders for the year ended
You will be able to attend the 2025 Annual Meeting via live audio webcast by visiting Massimo's virtual meeting website at www.virtualshareholdermeeting.com/MAMO2025 on
Your vote is important. Whether or not you plan to attend the 2025 Annual Meeting, please vote your shares by promptly completing, signing and returning the enclosed proxy card. You may also vote your shares over telephone or the Internet in accordance with the instructions on the proxy card. Any stockholder attending the 2025 Annual Meeting may vote in person at the virtual meeting, even if you have already returned a proxy card or voting instruction card.
| BY ORDER OF THE BOARD OF DIRECTORS OF MASSIMO GROUP |
||
| By: | /s/ |
|
| Chief Executive Officer and Chairman | ||
TABLE OF CONTENTS
| i |
(877) 881-6376
PROXY STATEMENT
FOR
2025 Annual Meeting OF STOCKHOLDERS
Your proxy is solicited by our Board of Directors (the "Board") for
At the 2025 Annual Meeting, you will be asked to consider and vote upon the following matters:
| (1) | the election of five (5) directors to serve terms in accordance with the Company's bylaws (the "Bylaws"); | |
| (2) | the ratification of the appointment of |
|
| (3) | to amend the 2024 Stock Incentive Plan; and | |
| (4) | any other business that may properly come before the 2025 Annual Meeting or any adjournments or postponements thereof. |
The Board unanimously recommends a vote "FOR" the approval of each of the Director Nominees in Proposal 1, and a vote "FOR" each of Proposal 2 and Proposal 3.
Pursuant to our Bylaws, our Board has fixed the close of business on
The Company has enclosed a copy of the proxy statement, the proxy card and the Company's annual report to stockholders for the year ended
You will be able to attend the 2025 Annual Meeting via live audio webcast by visiting Massimo's virtual meeting website at www.virtualshareholdermeeting.com/MAMO2025 on
Further instructions on how to attend and participate in the 2025 Annual Meeting via the Internet, including how to demonstrate proof of stock ownership, are available at www.proxyvote.com.
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QUESTIONS AND ANSWERS ABOUT THE 2025 Annual Meeting
Why am I Receiving these Materials?
This proxy statement and the accompanying materials are being provided for the solicitation of proxies by our Board of Directors for the 2025 Annual Meeting.
What is Included in these Materials?
These materials include the Notice, this proxy statement, a proxy card, and our Annual Report.
What is the Purpose of the 2025 Annual Meeting?
This is the 2025 Annual Meeting of the Company's Stockholders. At the meeting, you will be voting upon:
| (1) | The election of five (5) directors to serve terms in accordance with the Company's Bylaws; | |
| (2) | The ratification of the appointment of |
|
| (3) | To amend the 2024 Stock Incentive Plan; and | |
| (4) | Any other business that may properly come before the 2025 Annual Meeting or any adjournments or postponements thereof. |
How does the Board recommend that I vote?
The Board unanimously recommends a vote "FOR" the approval of each of the Director Nominees in Proposal 1, and a vote "FOR" each of Proposal 2 and Proposal 3.
How do Proxies Work?
Our Board is asking for your proxy. This means that you authorize person(s) selected by us to vote your shares at the meeting in the way you instruct and, with regard to any other business that may properly come before the meeting, as they think best.
I Share an Address with Another Stockholder and We Received Only One Paper Copy of the Proxy Materials. How May I Obtain An Additional Copy of the Proxy Materials?
The Company has adopted a procedure called "householding," which the
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To receive a separate copy of the Notice, the Proxy Statement and the Annual Report, you may contact us at the following address and phone number:
Attention: Corporate Secretary
Telephone: (877) 881-6376
Stockholders who hold shares in "street name" (as described below) may contact their brokerage firm, bank, broker-dealer or other similar organization to request information about householding.
Who is Entitled to Vote?
Our Board has fixed the close of business on
A list of stockholders of record entitled to vote at the 2025 Annual Meeting will be available for inspection at our principal executive offices located at
What is the Difference Between Holding Shares as a Record Holder and as a Beneficial Owner (Holding Shares in Street Name)?
If your shares are registered in your name with our transfer agent,
If your shares are held in a stock brokerage account, a bank or other holder of record, you are considered the "beneficial owner" of those shares held in "street name." If your shares are held in street name, these proxy materials have been forwarded to you by that organization. As the beneficial owner, you have the right to instruct this organization on how to vote your shares.
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Who May Attend the 2025 Annual Meeting?
Record holders and beneficial owners on the Record Date may attend the 2025 Annual Meeting. If your shares are held in street name and you would like to vote your shares at the 2025 Annual Meeting, you will need to obtain a valid proxy from the broker, bank, trustee or nominee that holds your shares giving you the right to vote the shares at the 2025 Annual Meeting.
How Do I Vote?
Stockholders of Record
For your convenience, our record holders have the following methods of voting:
| 1. | Vote by Internet. |
| (a) | Before the meeting: Go to www.proxyvote.com. Use the Internet to transmit your voting instructions and for electronic delivery information up until |
| (b) | During the meeting: Go to www.virtualshareholdermeeting.com/MAMO2025. You will be able to attend the 2025 Annual Meeting online, vote your shares electronically until voting is closed and submit your questions during the 2025 Annual Meeting. |
| 2. | Vote by mail. Mark, date, sign and mail promptly the enclosed proxy card (a postage-paid envelope is provided for mailing in |
| 3. | Vote by telephone. You may vote by proxy by calling 1-800-690-6903 and following the instructions on the proxy card. |
Beneficial Owners of Shares Held in Street Name
For your convenience, our beneficial owners have the following methods of voting:
| 1. | Vote by Internet. |
| (a) | Before the meeting: Go to www.proxyvote.com. Use the Internet to transmit your voting instructions and for electronic delivery information up until |
| (b) | During the meeting: Go to www.virtualshareholdermeeting.com/MAMO2025. You will be able to attend the 2025 Annual Meeting online, vote your shares electronically until voting is closed and submit your questions during the 2025 Annual Meeting. Obtain a valid legal proxy from the organization that holds your shares and attend and vote at the 2025 Annual Meeting. |
| 2. | Vote by mail. Mark, date, sign and mail promptly the enclosed proxy card (a postage-paid envelope is provided for mailing in |
| 3. | Vote by telephone. You may vote by proxy by calling 1-800-690-6903 and following the instructions on the proxy card. |
If you vote by Internet or by telephone, please DO NOT mail your proxy card.
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How Will My Shares Be Voted?
All shares which are entitled to vote and represented by a properly completed, executed and delivered proxy received before the 2025 Annual Meeting and not revoked will be voted at the 2025 Annual Meeting as instructed by you in a proxy delivered before the 2025 Annual Meeting. If you retua signed proxy card but do not indicate how your shares should be voted on a matter, the shares represented by your proxy will be voted "for" the approval of each of the Director Nominees, "for" each of Proposal 2 and Proposal 3, and with regard to any other matters that may be properly presented at the 2025 Annual Meeting and all matters incident to the conduct of the meeting. All votes will be tabulated by the inspector of elections appointed for the meeting, who will separately tabulate affirmative and negative votes, abstentions and broker non-votes.
Is My Vote Confidential?
Yes, your vote is confidential. The only persons who have access to your vote are the inspector of elections, individuals who help with processing and counting your votes, and persons who need access for legal reasons. Occasionally, stockholders provide written comments on their proxy cards, which may be forwarded to our Company's management and the Board.
What Constitutes a Quorum?
To carry on business at the 2025 Annual Meeting, we must have a quorum. A quorum is present when the holders of a majority of the Corporation's capital stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy. Thus, holders of the shares of common stock representing at least 20,814,897 votes must be represented in person or by proxy at the 2025 Annual Meeting to have a quorum. Your shares will be counted towards the quorum only if you submit a valid proxy (or if one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the 2025 Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. Shares held by us in treasury are not considered outstanding or considered to be present at the 2025 Annual Meeting. If there is not a quorum at the 2025 Annual Meeting, our stockholders may adjouthe meeting.
What is a Broker Non-Vote?
If your shares are held in street name, you must instruct the organization who holds your shares how to vote your shares. If you do not provide voting instructions, your shares will not be voted on any non-routine proposal. This vote is called a "broker non-vote". If you sign your proxy card, but do not provide instructions on how your broker should vote, your broker will vote your shares as recommended by our Board. Broker non-votes are not included in the tabulation of the voting results of any of the proposals and, therefore, do not affect these proposals.
Proposal 2 (the ratification of the appointment of
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What is an Abstention?
An abstention is a stockholder's affirmative choice to decline to vote on a proposal. Abstentions are not included in the tabulation of the voting results for any of the proposals and, therefore, do not affect these proposals. Abstentions are included for the purpose of determining whether a quorum has been reached.
How Many Votes Are Needed for Each Proposal to Pass?
| Proposal No. | Proposal | Vote Required | Broker Discretionary Vote Allowed |
|||
| (1) | Election of five (5) directors | Plurality of the votes cast | No | |||
| (2) | Ratification of the appointment of |
A majority of the votes cast | Yes | |||
| (3) | Amend the 2024 Stock Incentive Plan | A majority of the votes cast | No |
What Are the Voting Procedures?
In voting by proxy, you may vote in favor of or against the proposals, or you may abstain from voting on the proposals. You should specify your respective choices on the accompanying proxy card or your vote instruction form.
All shares represented by proxy will be voted at the 2025 Annual Meeting in accordance with the choices specified on the proxy, and where no choice is specified, in accordance with the recommendations of the Board. Thus, where no choice is specified, the proxies will be voted FOR the approval of each of the Director Nominees in Proposal 1, and FOR each of Proposals 2, and 3.
Is My Proxy Revocable?
You may revoke your proxy and reclaim your right to vote at any time before it is voted by (i) giving written notice to our administrator, (ii) delivering a properly completed, later-dated proxy card or vote instruction form to us or (iii) voting via the Internet at the 2025 Annual Meeting. All written notices of revocation and other communications with respect to revocations of proxies should be addressed to:
Do I Have Appraisal Rights?
Under
How can I find out the Results of the Voting at the 2025 Annual Meeting?
Preliminary voting results will be announced at the 2025 Annual Meeting. Final voting results will be published in a Current Report on Form 8-K, which we will file with the
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GOVERNANCE OF THE COMPANY
Directors and Executive Officers
The following table sets forth information concerning our executive officers and directors and their ages as of the date of this proxy statement:
| Age | Position(s) | |||
| 59 | Chief Executive Officer and Chairman of the Board of Directors | |||
| Dr. |
48 | Chief Financial Officer and Director | ||
| 35 | Vice President | |||
| 67 | Director, Chair of |
|||
| 55 | Director, Chair of Audit Committee | |||
| 54 | Director, Chair of Compensation Committee |
The following is a brief account of the business experience during the past five years (and, in some instances, for prior years) of each director and officer of our Company.
Dr.
Dr.
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Board of Directors and Committees
Our Board of Directors consists of five directors, including two executive directors and three independent directors. We also have established an Audit Committee, a
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Board Committees and Meetings
The Board held four meetings during fiscal year 2024. No director attended fewer than 75% of the aggregate number of all meetings of the Board and committees on which he or she served during fiscal year 2024. The Company expects the directors to attend the Meeting either online or by conference call.
Family Relationships
Except as disclosed herein, none of the directors or executive officers have a family relationship as defined in Item 401 of Regulation S-K.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our directors or executives has, during the past ten years, been involved in any legal proceedings in subscription (f) of Item 401 of Regulation S-K.
Controlled Company Status
A controlled company is a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. We are a controlled company because
Therefore, for so long as we remain a controlled company, we technically qualify and are eligible to be exempted from the obligation to comply with certain Nasdaq corporate governance requirements, however, we do not currently plan to take advantage of the exemptions provided to controlled companies, which include:
| ● | our Board of Directors is not required to be comprised of a majority of independent directors; |
| ● | our Board of Directors is not subject to the compensation committee requirement; and |
| ● | we are not subject to the requirements that director nominees be selected either by the independent directors or a nomination committee comprised solely of independent directors. |
The controlled company exemptions do not apply to the audit committee requirement or the requirement for executive sessions of independent directors. We are required to disclose in our annual report that we are a controlled company and the basis for that determination. Although we do not currently plan to take advantage of the exemptions provided to controlled companies, we may in the future take advantage of such exemptions.
Role of the Board of Directors in Risk Oversight
The Board of Directors is responsible for assessing the risks facing our company and considers risk in every business decision and as part of our business strategy. The Board of Directors recognizes that it is neither possible nor prudent to eliminate all risk, and that strategic and appropriate risk-taking is essential for us to compete in our industry and in the global market and to achieve our growth and profitability objectives. Effective risk oversight, therefore, is an important priority of the Board of Directors.
While the Board of Directors oversees our risk management, management is responsible for day-to-day risk management processes. Our Board of Directors expects management to consider risk and risk management in each business decision, to proactively develop and monitor risk management strategies and processes for day-to-day activities and to effectively implement risk management strategies that are adopted by the Board of Directors. The Board of Directors reviews and adjusts our risk management strategies at regular intervals, or as needed.
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Code of Business Conduct
Our Board of Directors has adopted a code of business conduct and ethics, the "Code of Business Conduct," to ensure that our business is conducted in a consistently legal and ethical manner. Our policies and procedures cover all major areas of professional conduct, including employee policies, conflicts of interest, protection of confidential information, and compliance with applicable laws and regulations. The Code of Business Conduct is available at our website at www.massimomotor.com. The reference to our website address in this proxy statement does not include or incorporate by reference the information on our website into this proxy statement. We intend to disclose future amendments to certain provisions of our code of conduct, or waivers of these provisions, on our website or in public filings.
Board Committees
Our Board of Directors has appointed an Audit Committee, Compensation Committee, and a
Audit Committee
The Audit Committee consists of
| ● | appointing, approving the compensation of, and assessing the independence of our independent registered public accounting firm; |
| ● | pre-approving audit and permissible non-audit services, and the terms of such services, to be provided by our independent registered public accounting firm; |
| ● | reviewing and discussing with management and our independent registered public accounting firm our annual and quarterly financial statements and related disclosures; |
| ● | coordinating the oversight and reviewing the adequacy of our internal control over financial reporting; |
| ● | establishing policies and procedures for the receipt and retention of accounting-related complaints, whistleblowers, and concerns; and |
| ● | reviewing and approving any related party transactions. |
Our Audit Committee complies with all applicable requirements of the
The Audit Committee held four meetings in fiscal year 2024.
Compensation Committee
Our Compensation Committee consists of
| ● | reviewing and approving corporate goals and objectives relevant to compensation of our chief executive officer; |
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| ● | evaluating the performance of our chief executive officer in light of such corporate goals and objectives and determining the compensation of our chief executive officer; |
| ● | determining the compensation of all our other officers and reviewing periodically the aggregate amount of compensation payable to such officers; |
| ● | overseeing and making recommendations to the Board of Directors with respect to our incentive-based compensation and equity plans; and |
| ● | reviewing and making recommendations to the Board of Directors with respect to director compensation. |
The composition of our Compensation Committee complies with all applicable requirements of the
The Compensation Committee held one meeting in fiscal year 2024.
Nominating and Corporate Governance Committee
| ● | making recommendations to the Board of Directors regarding the size and composition of the Board of Directors; |
| ● | recommending qualified individuals as nominees for election as directors; |
| ● | reviewing the appropriate skills and characteristics required of director nominees; |
| ● | establishing and administering a periodic assessment procedure relating to the performance of the Board of Directors as a whole and its individual members; and |
| ● | periodically reviewing the corporate governance guidelines and supervising the management representative charged with implementing our corporate governance procedures. |
The composition of our
Insider Trading Policy
On
Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act, as amended, requires our directors and certain of our officers, as well as persons who own more than 10% of a registered class of our equity securities ("Reporting Persons"), to file reports with the
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Director Independence
Our Board has reviewed the independence of our directors, applying the Nasdaq independence standards. Based on this review, the Board determined that each
We have not implemented a formal policy or procedure by which our stockholders can communicate directly with the Board. Nevertheless, every effort will be made to ensure that the views of stockholders are heard by the Board, and that appropriate responses are provided to stockholders in a timely manner. During the upcoming year, the Board will continue to monitor whether it would be appropriate to adopt such a process.
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EXECUTIVE COMPENSATION
The following table sets forth total compensation paid to our named executive officers for the years ended
Summary Compensation Table
| Year | Salary $ |
Bonus $ |
Option Based Awards (6) $ |
Stock Awards (5) $ |
Other Compensation $ |
Total $ |
||||||||||||||||||||
| 2024 | $ | 236,527 | 100,007 | 176,850 | $ |
- |
$ | 505,134 | ||||||||||||||||||
| Chief Executive Officer(1) | 2023 | $ | 272,115 |
- |
- |
$ |
- |
$ | 272,115 | |||||||||||||||||
| Dr. |
2024 | $ | 200,010 | 62,091 | 400,958 |
- |
$ | 663,059 | ||||||||||||||||||
| Chief Financial Officer(2) | 2023 | $ | 110,212 |
- |
- |
- |
$ | 110,212 | ||||||||||||||||||
| 2024 | 109,237 | - |
- |
11,640 | 63,455 | $ | 184,332 | |||||||||||||||||||
| Vice President(3) | 2023 | $ | 161,540 |
- |
- |
$ | 161,540 | |||||||||||||||||||
| 2024 | $ | 230,950 | 62,091 | 117,901 | $ | 316,200 | $ | 714,852 | ||||||||||||||||||
| Vice President(4) | 2023 | $ | 183,945 |
- |
$ |
- |
$ | 183,945 | ||||||||||||||||||
| (1) | In 2024, |
| (2) | The compensation in the table reflects salary paid by |
| (3) | |
| (4) | In 2024, |
| (5) | Amounts shown represent the aggregate full grant date fair value of each award calculated in accordance with FASB ASC Topic 718. The assumptions made in the calculation of these amounts are contained in Note 17 to the Company's audited financial statements for the year ended |
| (6) | Amounts shown represent the aggregate grant date fair value of options granted in |
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We have purchased director and officer liability insurance that provides financial protection for our directors and officers in the event that they are sued in connection with the performance of their services and also provides employment practices liability coverage, which insures for harassment and discrimination suits.
Compensation Pursuant to Agreements and Plans
Employment Agreements
We have entered into employment agreements with our Chief Executive Officer, Chief Financial Officer, and Vice President, with each agreement effective
Agreement with
We entered into an employment agreement, effective
Under the CEO employment agreement,
Agreement with Dr.
We entered into an employment agreement, effective
Under the CFO employment agreement,
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Agreement with
We had entered into an employment agreement, effective
Under the VP employment agreement,
Agreement with
On
Compensation of Directors
The following table sets forth a summary of compensation for the fiscal year ended
| Fees Earned or Paid in Cash ($) |
Stock Compensation ( |
Option Compensation ( |
Total ($) |
|||||||||||||
| - | $ | 21,243 | $ |
- |
$ | 21,243 | ||||||||||
|
- |
$ | 21,243 | $ |
- |
$ | 21,243 | ||||||||||
| - | $ | 21,243 | $ |
- |
$ | 21,243 | ||||||||||
| (1) | The amounts in these columns represent the grant date fair values of the awards calculated in accordance with ASC Topic 718. Please see Note 17 to the consolidated financial statements for the year ended |
Equity Incentive Plan
The 2024 Plan is intended to provide for awards to attract, motivate, retain, and reward selected key employees and other eligible persons, including our named executive officers. A summary of the 2024 Plan is set out below.
Number of Shares
2 million shares of our common stock are reserved for grant or issuance under the 2024 Plan. Shares issuable under the 2024 Plan may be authorized, but unissued, or reacquired shares. Up to two million shares of our common stock may be issued upon the exercise of incentive stock options.
The number of shares available for issuance under the 2024 Plan also includes an automatic annual increase, or the evergreen feature, on the first day of each calendar year, beginning
| ● | a number of shares equal to 1% of the aggregate number of shares of our common stock issued and outstanding as of |
| ● | such number of shares of our common stock as the plan administrator may determine. |
Any shares of our common stock that are represented by awards under the 2024 Plan that are forfeited, expire, or are cancelled or settled in cash without delivery of shares, or that are forfeited back to us or reacquired by us after delivery for any reason, or that are tendered to us or withheld to pay the exercise price or related tax withholding obligations in connection with any award under the 2024 Plan, will again be available for awards under the 2024 Plan. Only shares of our common stock actually issued under the 2024 Plan will reduce the share reserve.
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Annual Limitation on Awards to Non-Employee Directors
The 2024 Plan contains a limitation whereby the value of all awards under the 2024 Plan and all other cash compensation paid by the Company to any non-employee director may not exceed
Administration
The 2024 Plan is administered by our Compensation Committee or such other similar committee pursuant to the terms of the 2024 Plan. The plan administrator, which initially is our Compensation Committee, has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2024 Plan. The plan administrator may delegate to one or more of our officers the authority to grant awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act.
Eligibility
Persons eligible to participate in the 2024 Plan are employees, non-employee directors, and consultants of the Company and its subsidiaries as selected from time to time by the plan administrator in its discretion.
Types of Awards
The 2024 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and other-stock based awards, or collectively, awards.
Stock Options. The 2024 Plan permits the granting of both options to purchase shares of our Common Stock intended to qualify as incentive stock options under Section 422 of the Code ("ISOs") and options that do not so qualify (nonqualified stock option or "NSOs"). Options granted under the 2024 Plan are NSOs if they fail to qualify as ISOs or exceed the annual limit on ISOs. ISOs may only be granted to employees of the Company and its subsidiaries. NSOs may be granted to any persons eligible to receive awards under the 2024 Plan.
The option exercise price of each option will be determined by the plan administrator. The exercise price for an ISO may not be less than 100% of the fair market value of the Company's common stock on the date of grant or, in the case of an ISO granted to a 10% stockholder, 110% of such share's fair market value. The term of each option will be fixed by the plan administrator and may not exceed ten (10) years from the date of grant (or five years for an ISO granted to a 10% stockholder). The plan administrator will determine at what time or times each option may be exercised, including the ability to accelerate the vesting of such options.
Upon exercise of options, the option exercise price must be paid in full either in cash, check, or, with approval of the plan administrator, by delivery (or attestation to the ownership) of shares of our Common Stock that are beneficially owned by the optionee free of restrictions or were purchased in the open market. Subject to applicable law and approval of the plan administrator, the exercise price may also be made by means of a broker-assisted cashless exercise. In addition, the plan administrator may permit NSOs to be exercised using a "net exercise" arrangement that reduces the number of shares issued to the optionee by the largest whole number of shares with fair market value that does not exceed the aggregate exercise price.
Stock Appreciation Rights. The plan administrator may award stock appreciation rights ("SARs") subject to such conditions and restrictions as it may determine. SARs entitle the recipient to shares of Common Stock, or cash, equal to the value of the appreciation in the Company's stock price over the exercise price, as set by the plan administrator. The term of each SAR will be fixed by the plan administrator and may not exceed ten years from the date of grant. The plan administrator will determine at what time or times each SAR may be exercised, including the ability to accelerate the vesting of such SARs.
Restricted Stock. A restricted stock award is an award of Common Stock that vests in accordance with the terms and conditions established by the plan administrator. The plan administrator will determine the persons to whom grants of restricted stock awards are made, the number of restricted shares to be awarded, the price (if any) to be paid for the restricted shares, the time or times within which awards of restricted stock may be subject to forfeiture, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of restricted stock awards. Unless otherwise provided in the applicable award agreement, a participant generally will have the rights and privileges of a stockholder as to such restricted shares, including without limitation the right to vote such restricted shares and the right to receive dividends, if applicable.
| 15 |
Restricted Stock Units. Restricted stock units ("RSUs") are the right to receive shares of Common Stock at a future date in accordance with the terms of such grant upon the attainment of certain conditions specified by the plan administrator. Restrictions or conditions could include, but are not limited to, the attainment of performance goals, continuous service with the Company or its subsidiaries, the passage of time or other restrictions or conditions. The plan administrator determines the persons to whom grants of RSUs are made, the number of RSUs to be awarded, the time or times within which awards of RSUs may be subject to forfeiture, the vesting schedule, and rights to acceleration thereof, and all other terms and conditions of the RSUs. The value of the RSUs may be paid in shares of Common Stock, cash, other securities, other property, or a combination of the foregoing, as determined by the plan administrator.
The holders of RSUs will have no voting rights. Prior to settlement or forfeiture, RSUs awarded under the 2024 Plan may, at the plan administrator's discretion, provide for a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all dividends paid on one share of Common Stock while each RSU is outstanding. Dividend equivalents may be converted into additional RSUs. Settlement of dividend equivalents may be made in the form of cash, Common Stock, other securities, other property, or a combination of the foregoing. Prior to distribution, any dividend equivalents shall be subject to the same conditions and restrictions as the RSUs to which they are payable.
Other Stock-Based Awards. Other stock-based awards may be granted either alone, in addition to, or in tandem with, other awards granted under the 2024 Plan and/or cash awards made outside of the 2024 Plan. The plan administrator shall have authority to determine the persons to whom and the time or times at which other stock-based awards will be made, the amount of such other stock-based awards, and all other conditions, including any dividend and/or voting rights.
Tax Withholding
Participants in the 2024 Plan are responsible for the payment of any federal, state, or local taxes that the Company or its subsidiaries are required by law to withhold upon the exercise of options or stock appreciation rights or vesting of other awards. The plan administrator may cause any tax withholding obligation of the Company or its subsidiaries to be satisfied, in whole or in part, by the applicable entity withholding from shares of Common Stock to be issued pursuant to an award a number of shares with an aggregate fair market value that would satisfy the withholding amount due. The plan administrator may also require any tax withholding obligation of the Company or its subsidiaries to be satisfied, in whole or in part, by an arrangement whereby a certain number of shares issued pursuant to any award are immediately sold and proceeds from such sale are remitted to the Company or its subsidiaries in an amount that would satisfy the withholding amount due.
Transferability of Awards
Unless determined otherwise by the plan administrator, an award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner, except to a participant's estate or legal representative, and may be exercised, during the lifetime of the participant, only by the participant. If the plan administrator makes an award transferable, such award will contain such additional terms and conditions as the plan administrator deems appropriate.
Equitable Adjustments
In the event of a merger, consolidation, recapitalization, stock split, reverse stock split, reorganization, split-up, spin-off, combination, repurchase or other change in corporate structure affecting the Company's Common Stock, the maximum number and kind of shares reserved for issuance or with respect to which awards may be granted under the 2024 Plan will be adjusted to reflect such event, and the plan administrator will make such adjustments as it deems appropriate and equitable in the number, kind, and exercise price of shares covered by outstanding awards made under the 2024 Plan.
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Change in Control
In the event of any proposed change in control (as defined in the 2024 Plan), the plan administrator will take any action as it deems appropriate, which action may include, without limitation, the following: (i) the continuation of any award, if the Company is the surviving corporation; (ii) the assumption of any award by the surviving corporation or its parent or subsidiary; (iii) the substitution by the surviving corporation or its parent or subsidiary of equivalent awards; (iv) accelerated vesting of the award, with all performance objectives and other vesting criteria deemed achieved at targeted levels, and a limited period during which to exercise the award prior to closing of the change in control, or (v) settlement of any award for the change in control price (less, to the extent applicable, the per share exercise price).
Amendment and Termination
The Board may amend or terminate the 2024 Plan at any time. Any such termination will not affect outstanding awards. No amendment, alteration, suspension, or termination of the 2024 Plan will materially impair the rights of any participant, unless mutually agreed otherwise between the participant and the Company. Approval of the stockholders shall be required for any amendment, where required by applicable law, as well as (i) to increase the number of shares available for issuance under the 2024 Plan and (ii) to change the persons or class of persons eligible to receive awards under the 2024 Plan.
Term of Plan
The 2024 Plan was adopted by the Board on
Outstanding Equity Awards at Fiscal Year-End
The table below summarizes all unexercised options, stock that has not vested, and equity incentive plan awards for each named executive officer as of
| Option Awards | Stock Awards | |||||||||||||||||||||||||
| Number of Securities Underlying Unexercised Options | Option Exercise | Option Expiration | No. of Shares or Units of Stock that Have Not | Market Value of Shares or Units of Stock that Have Not | Equity Incentive Plan Awards: No. of Unearned Shares, Units or Other Rights That Have Not | |||||||||||||||||||||
| Exercisable | Un-exercisable | Price ($) (1) |
Date | Vested | Vested ($) (2) |
Vested | ||||||||||||||||||||
| - | 46,860 | $ | 4.27 | 37,500 | 96,375 | - | ||||||||||||||||||||
| - | 103,140 | $ | 4.00 | - | - | |||||||||||||||||||||
| Dr. |
- | 50,000 | $ | 4.00 | 25,000 | 64,250 | - | |||||||||||||||||||
| - | 50,000 | $ | 4.00 | - | - | |||||||||||||||||||||
| - | 50,000 | $ | 4.00 | 25,000 | 64,250 | - | ||||||||||||||||||||
| - | 50,000 | $ | 4.00 | - | - | |||||||||||||||||||||
| (1) | Weighted Average Exercise Price. | |
| (2) | Measured at closing stock price on |
Clawback Policy
On
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BENEFICIAL OWNERSHIP OF OUR CAPITAL STOCK BY CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership of our common stock as of
| ● | each person known by us to be the beneficial owner of more than 5% of our outstanding common stock; |
| ● | each of our executive officers and directors that beneficially owns our common stock; and |
| ● | all our executive officers and directors as a group. |
In the table below, percentage ownership is based on 41,546,700 shares of our common stock issued and outstanding as of
Beneficial ownership is determined in accordance with the rules of the
The address of each holder listed below, except as otherwise indicated, is c/o
|
Shares of Common Stock Beneficially Owned(1) |
Percent of Common Stock Beneficially Owned |
|||||||
| Executive Officers and Directors | ||||||||
| 32,122,500 | 77 | % | ||||||
| Dr. |
108,334 | * | ||||||
| 6,750 | * | |||||||
| 6,750 | * | |||||||
| 6,750 | * | |||||||
| - | - | |||||||
| All directors and executive officers as a group (6 persons) | 32,251,084 | 78 | % | |||||
| 5% Stockholders | ||||||||
| 4,330,000 | 10.4 | % | ||||||
| * | Represents beneficial ownership of less than 1%. |
| 18 |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The following are transactions in the fiscal year ended
Our Audit Committee reviews all related party transactions on an ongoing basis and all such transactions be approved by the Audit Committee. In determining whether to approve a related party transaction, the Audit Committee shall consider, among other factors, the following factors to the extent relevant to the related party transaction:
| ● | whether the terms of the related party transaction are fair to the Company and on the same basis as would apply if the transaction did not involve a related party; |
| ● | whether there are business reasons for the Company to enter into the related-party transaction; |
| ● | whether the related party transaction would impair the independence of an outside director; |
| ● | whether the related party transaction would present an improper conflict of interest for any director or executive officer of the Company, taking into account the size of the transaction, the overall financial position of the director, executive officer or the related party, the direct or indirect nature of the director's, executive officer's or the related party's interest in the transaction and the ongoing nature of any proposed relationship, and any other factors the Audit Committee deems relevant; and |
| ● | any pre-existing contractual obligations. |
The following are the major related parties and their relationships with us:
| Relationship to the Company | ||
| Controlling shareholder of the Company | ||
| Controlled by |
||
| Controlled by |
As of
| Loan from |
$ | 7,920,141 | ||
| Repayment | 2,373,593 | |||
| Capital dividend declared | - | |||
| Loan from |
$ | 5,546,548 | ||
| Non-current | - | |||
| Current | $ | 5,546,548 | ||
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On
On
The Company recorded rent expense of
In connection with the Company's bank borrowing,
On
On
Statement of Policy
All future transactions between us and our officers, directors or five percent stockholders, and respective affiliates will be on terms no less favorable than could be obtained from unaffiliated third parties and will be approved by a majority of our independent directors who do not have an interest in the transactions and who had access, at our expense, to our legal counsel or independent legal counsel.
To the best of our knowledge, during the past three fiscal years, other than as set forth above, there were no material transactions, or series of similar transactions, or any currently proposed transactions, or series of similar transactions, to which we were or are to be a party, in which the amount involved exceeds
Director Independence
Our common stock is listed on Nasdaq. The listing rules of this stock exchange generally require that a majority of the members of a listed company's Board of Directors, and each member of a listed company's audit, compensation and nominating and corporate governance committees, be independent. Our Board of Directors has determined that
Audit committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Exchange Act, subject to the transition rule that is applicable to a newly public company. In order to be considered independent for purposes of Rule 10A-3, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the Board of Directors, or any other board committee accept, directly or indirectly, receive any consulting, advisory, or other compensatory fee from the listed company or any of its subsidiaries or be an affiliated person of the listed company or any of its subsidiaries.
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REPORT OF THE AUDIT COMMITTEE
The following Audit Committee Report shall not be deemed to be "soliciting material," "filed" with the
The Audit Committee is comprised of three independent directors (as defined under Rule 5605(a)(2) of the
We have reviewed and discussed with management the Company's audited consolidated financial statements as of and for the fiscal year ended
We have reviewed and discussed with management the Company's outside accounting firm, the quality and the acceptability of the Company's financial reporting and internal controls.
We have discussed with the Company's outside accounting firm the overall scope and plans for their audit as well as the results of their examinations, their evaluations of the Company's internal controls, and the overall quality of the Company's financial reporting.
We have discussed with management and the Company's outside accounting firm such other matters as required to be discussed with the Audit Committee under Statement on Auditing Standards No. 61, as amended, as adopted by the
We have received and reviewed the written disclosures and the letter from the Company's outside accounting firm required by applicable requirements of the PCAOB regarding the Company's outside accounting firm communications with the Audit Committee concerning independence, and have discussed with the Company's outside accounting firm, their independence from management and the Company.
Based on the reviews and discussions referred to above, we recommended to the Board that the financial statements referred to above be included in the Company's Annual Report on Form 10-K for the fiscal year ended
This proxy statement is submitted by the Audit Committee of the Board of Directors:
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PROPOSAL 1:
ELECTION OF NOMINEE DIRECTORS
Five Nominee Directors are to be elected at the meeting to serve until the 2026 annual meeting of stockholders and until their respective successors shall have been elected and have qualified or until their earlier resignation or removal. Unless otherwise instructed, the persons named in the accompanying proxy intend to vote the shares represented by the Proxy for the election of the five (5) nominees listed below. Although it is not anticipated that any nominee will decline or be unable to serve as a Director, in such event, proxies will be voted by the proxy holder for such other persons as may be designated by the Board, unless the Board reduces the number of directors to be elected. Election of a board of directors requires a plurality of the votes cast at the 2025 Annual Meeting at which a quorum is present.
Directors Standing for Election:
The following table sets forth the five nominees for membership on the Board. It also provides certain information about the nominees as of the Record Date.
| Age | Position(s) | |||
| 59 | Chief Executive Officer and Chairman of the Board of Directors | |||
| Dr. |
48 | Chief Financial Officer and Director | ||
| 67 | Director, Chair of |
|||
| 55 | Director, Chair of Audit Committee | |||
| 54 | Director, Chair of Compensation Committee |
| 22 |
Dr.
Dr.
| 23 |
Director Compensation
The following table sets forth a summary of compensation for the fiscal year ended
| Fees Earned or Paid in Cash ($) |
Stock Compensation ( |
Option Compensation ( |
Total ($) |
|||||||||||||
| - | $ | 21,243 | $ | - | $ | 21,243 | ||||||||||
| - | $ | 21,243 | $ | - | $ | 21,243 | ||||||||||
| - | $ | 21,243 | $ | - | $ | 21,243 | ||||||||||
| (1) | The amounts in these columns represent the grant date fair values of the awards calculated in accordance with ASC Topic 718. Please see Note 17 to the consolidated financial statements for the year ended |
VOTE REQUIRED
Under applicable
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ELECTION TO THE BOARD OF DIRECTORS OF EACH OF THE ABOVE-MENTIONED NOMINEES UNDER THIS PROPOSAL 1.
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PROPOSAL 2:
RATIFICATION OF THE APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Our Board has appointed
The selection of our independent registered public accounting firm is not required to be submitted to a vote of our stockholders for ratification. However, our Company is submitting this matter to the stockholders as a matter of good corporate governance. Even if the appointment is ratified, the Board may, in its discretion, appoint a different independent registered public accounting firm at any time during the year if they determine that such a change would be in the best interests of our Company and our stockholders. If the appointment is not ratified, the Board will consider its options.
Our Audit Committee retains our independent registered public accounting firm and approves in advance all audit and non-audit services performed by this firm and any other auditing firms. Although management has the primary responsibility for the financial statements and the reporting process including the systems of internal control, the Audit Committee consults with management and our independent registered public accounting firm regarding the preparation of financial statements and generally oversees the relationship of the independent registered public accounting firm with our Company. The independent registered public accounting firm is responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, relating to their judgments as to the quality, not just the acceptability, of the Company's accounting principles, and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards.
It is not the duty of the Audit Committee to determine that our Company's financial statements and disclosures are complete and accurate and in accordance with generally accepted accounting principles or to plan or conduct audits. Those are the responsibilities of management and the Company's independent registered public accounting firm. In giving its recommendation to the Board, the Audit Committee has relied on: (1) management's representation that such financial statements have been prepared with integrity and objectivity and in conformity with generally accepted accounting principles; and (2) the report of the Company's independent registered public accounting firm with respect to such financial statements.
We have been advised by ZH CPA that neither the firm nor any of its associates had any relationship during the last fiscal year with our Company other than the usual relationship that exists between independent registered public accountant firms and their clients. Representatives of ZH CPA are not expected to attend the Meeting virtually and therefore are not expected to be available to respond to any questions. As a result, representatives of ZH CPA will not make a statement at the Meeting.
Fees Paid to Auditor
The following table sets forth the fees for professional services rendered by ZH CPA for audit and other services provided for the fiscal years ended
| 2024 | 2023 | |||||||
| Audit Fees | $ | 300,000 | $ | 295,000 | ||||
| Audit Related Fees | - | - | ||||||
| Tax Fees | - | - | ||||||
| All Other Fees | - | - | ||||||
| Total | $ | 300,000 | $ | 295,000 | ||||
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors
Consistent with
VOTE REQUIRED
The affirmative vote of the holders of a majority of the votes cast at the 2025 Annual Meeting is required for the ratification of the appointment of ZH CPA as our independent registered public accounting firm for the fiscal year ending
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF ZH CPA AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING
| 25 |
PROPOSAL 3:
AMEND THE 2024 STOCK INCENTIVE PLAN
On
We are seeking stockholder approval to amend
The Board has determined that it is in the best interests of the Company and its stockholders to approve this proposal. The Board has approved the Amendment to the 2024 Plan and share increase subject to stockholder approval and recommends that stockholders vote in favor of this proposal at the Annual Meeting.
If stockholders approve this proposal, the Amendment and the share increase will become effective as of the date of stockholder approval. If stockholders do not approve this proposal, the Amendment and share increase will not take effect and our 2024 Plan will continue to be administered in its current form. The remainder of this discussion, when referring to the 2024 Plan, refers to the 2024 Plan as if this proposal to amend the 2024 Plan is approved by our stockholders, unless otherwise specified or the context otherwise references the 2024 Plan prior to the Amendment.
2024 Incentive Award Plan - Summary
The following is a summary of the principal features of the 2024 Plan. This summary does not purport to be a complete description of all of the provisions of the 2024 Plan and it is qualified in its entirety by reference to the full text of the 2024 Plan.
Number of Shares
4 million shares of our Common Stock are reserved for grant or issuance under the 2024 Plan. Shares issuable under the 2024 Plan may be authorized, but unissued, or reacquired shares. Up to two million shares of our Common Stock may be issued upon the exercise of incentive stock options.
The number of shares available for issuance under the 2024 Plan includes an automatic annual increase, or the evergreen feature, on the first day of each calendar year, beginning
| ● | a number of shares equal to 3% of the aggregate number of shares of our Common Stock issued and outstanding as of |
|
| ● | such number of shares of our Common Stock as the plan administrator may determine. |
Any shares of our Common Stock that are represented by awards under the 2024 Plan that are forfeited, expire, or are cancelled or settled in cash without delivery of shares, or that are forfeited back to us or reacquired by us after delivery for any reason, or that are tendered to us or withheld to pay the exercise price or related tax withholding obligations in connection with any award under the 2024 Plan, will again be available for awards under the 2024 Plan. Only shares of our Common Stock actually issued under the 2024 Plan will reduce the share reserve.
| 26 |
Annual Limitation on Awards to Non-Employee Directors
The 2024 Plan contains a limitation whereby the value of all awards under the 2024 Plan and all other cash compensation paid by the Company to any non-employee director may not exceed
Administration
The 2024 Plan is administered by our Compensation Committee or such other similar committee pursuant to the terms of the 2024 Plan. The plan administrator, which initially is our Compensation Committee, has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2024 Plan. The plan administrator may delegate to one or more of our officers the authority to grant awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act.
Eligibility
Persons eligible to participate in the 2024 Plan are employees, non-employee directors, and consultants of the Company and its subsidiaries as selected from time to time by the plan administrator in its discretion. As of the date of this proxy statement, approximately 100 employees and 3 non-employee directors are eligible to receive awards under the 2024 Plan.
Types of Awards
The 2024 Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and other-stock based awards, or collectively, awards.
Stock Options. The 2024 Plan permits the granting of both options to purchase shares of our Common Stock intended to qualify as incentive stock options under Section 422 of the Code ("ISOs") and options that do not so qualify (nonqualified stock option or "NSOs"). Options granted under the 2024 Plan will be NSOs if they fail to qualify as ISOs or exceed the annual limit on ISOs. ISOs may only be granted to employees of the Company and its subsidiaries. NSOs may be granted to any persons eligible to receive awards under the 2024 Plan.
The option exercise price of each option will be determined by the plan administrator. The exercise price for an ISO may not be less than 100% of the fair market value of the Company's common stock on the date of grant or, in the case of an ISO granted to a 10% stockholder, 110% of such share's fair market value. The term of each option will be fixed by the plan administrator and may not exceed ten (10) years from the date of grant (or five years for an ISO granted to a 10% stockholder). The plan administrator will determine at what time or times each option may be exercised, including the ability to accelerate the vesting of such options.
Upon exercise of options, the option exercise price must be paid in full either in cash, check, or, with approval of the plan administrator, by delivery (or attestation to the ownership) of shares of our Common Stock that are beneficially owned by the optionee free of restrictions or were purchased in the open market. Subject to applicable law and approval of the plan administrator, the exercise price may also be made by means of a broker-assisted cashless exercise. In addition, the plan administrator may permit NSOs to be exercised using a "net exercise" arrangement that reduces the number of shares issued to the optionee by the largest whole number of shares with fair market value that does not exceed the aggregate exercise price.
Stock Appreciation Rights. The plan administrator may award stock appreciation rights ("SARs") subject to such conditions and restrictions as it may determine. SARs entitle the recipient to shares of Common Stock, or cash, equal to the value of the appreciation in the Company's stock price over the exercise price, as set by the plan administrator. The term of each SAR will be fixed by the plan administrator and may not exceed ten years from the date of grant. The plan administrator will determine at what time or times each SAR may be exercised, including the ability to accelerate the vesting of such SARs.
| 27 |
Restricted Stock. A restricted stock award is an award of Common Stock that vests in accordance with the terms and conditions established by the plan administrator. The plan administrator will determine the persons to whom grants of restricted stock awards are made, the number of restricted shares to be awarded, the price (if any) to be paid for the restricted shares, the time or times within which awards of restricted stock may be subject to forfeiture, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of restricted stock awards. Unless otherwise provided in the applicable award agreement, a participant generally will have the rights and privileges of a stockholder as to such restricted shares, including without limitation the right to vote such restricted shares and the right to receive dividends, if applicable.
Restricted Stock Units. Restricted stock units ("RSUs") are the right to receive shares of Common Stock at a future date in accordance with the terms of such grant upon the attainment of certain conditions specified by the plan administrator. Restrictions or conditions could include, but are not limited to, the attainment of performance goals, continuous service with the Company or its subsidiaries, the passage of time or other restrictions or conditions. The plan administrator determines the persons to whom grants of RSUs are made, the number of RSUs to be awarded, the time or times within which awards of RSUs may be subject to forfeiture, the vesting schedule, and rights to acceleration thereof, and all other terms and conditions of the RSUs. The value of the RSUs may be paid in shares of Common Stock, cash, other securities, other property, or a combination of the foregoing, as determined by the plan administrator.
The holders of RSUs will have no voting rights. Prior to settlement or forfeiture, RSUs awarded under the 2024 Plan may, at the plan administrator's discretion, provide for a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all dividends paid on one share of Common Stock while each RSU is outstanding. Dividend equivalents may be converted into additional RSUs. Settlement of dividend equivalents may be made in the form of cash, Common Stock, other securities, other property, or a combination of the foregoing. Prior to distribution, any dividend equivalents shall be subject to the same conditions and restrictions as the RSUs to which they are payable.
Other Stock-Based Awards. Other stock-based awards may be granted either alone, in addition to, or in tandem with, other awards granted under the 2024 Plan and/or cash awards made outside of the 2024 Plan. The plan administrator shall have authority to determine the persons to whom and the time or times at which other stock-based awards will be made, the amount of such other stock-based awards, and all other conditions, including any dividend and/or voting rights.
Tax Withholding
Participants in the 2024 Plan are responsible for the payment of any federal, state, or local taxes that the Company or its subsidiaries are required by law to withhold upon the exercise of options or stock appreciation rights or vesting of other awards. The plan administrator may cause any tax withholding obligation of the Company or its subsidiaries to be satisfied, in whole or in part, by the applicable entity withholding from shares of Common Stock to be issued pursuant to an award a number of shares with an aggregate fair market value that would satisfy the withholding amount due. The plan administrator may also require any tax withholding obligation of the Company or its subsidiaries to be satisfied, in whole or in part, by an arrangement whereby a certain number of shares issued pursuant to any award are immediately sold and proceeds from such sale are remitted to the Company or its subsidiaries in an amount that would satisfy the withholding amount due.
Transferability of Awards
Unless determined otherwise by the plan administrator, an award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner, except to a participant's estate or legal representative, and may be exercised, during the lifetime of the participant, only by the participant. If the plan administrator makes an award transferable, such award will contain such additional terms and conditions as the plan administrator deems appropriate.
| 28 |
Equitable Adjustments
In the event of a merger, consolidation, recapitalization, stock split, reverse stock split, reorganization, split-up, spin-off, combination, repurchase or other change in corporate structure affecting the Company's Common Stock, the maximum number and kind of shares reserved for issuance or with respect to which awards may be granted under the 2024 Plan will be adjusted to reflect such event, and the plan administrator will make such adjustments as it deems appropriate and equitable in the number, kind, and exercise price of shares covered by outstanding awards made under the 2024 Plan.
Change in Control
In the event of any proposed change in control (as defined in the 2024 Plan), the plan administrator will take any action as it deems appropriate, which action may include, without limitation, the following: (i) the continuation of any award, if the Company is the surviving corporation; (ii) the assumption of any award by the surviving corporation or its parent or subsidiary; (iii) the substitution by the surviving corporation or its parent or subsidiary of equivalent awards; (iv) accelerated vesting of the award, with all performance objectives and other vesting criteria deemed achieved at targeted levels, and a limited period during which to exercise the award prior to closing of the change in control, or (v) settlement of any award for the change in control price (less, to the extent applicable, the per share exercise price).
Amendment and Termination
The Board may amend or terminate the 2024 Plan at any time. Any such termination will not affect outstanding awards. No amendment, alteration, suspension, or termination of the 2024 Plan will materially impair the rights of any participant, unless mutually agreed otherwise between the participant and the Company. Approval of the stockholders shall be required for any amendment, where required by applicable law, as well as (i) to increase the number of shares available for issuance under the 2024 Plan and (ii) to change the persons or class of persons eligible to receive awards under the 2024 Plan.
Term of Plan
The 2024 Plan will be effective when adopted by the Board in advance of completion of this Offering and will remain in effect for ten years from that date, unless it is terminated earlier by the Board.
Certain United States Federal Income Tax Aspects
The following is a summary of the principal
The 2024 Plan is not qualified under the provisions of Section 401(a) of the Code and is not subject to any of the provisions of the Employee Retirement Income Security Act of 1974, as amended. The Company's ability to realize the benefit of any tax deductions described below depends on the Company's generation of taxable income as well as the requirement of reasonableness and the satisfaction of the Company's tax reporting obligations.
Incentive Stock Options. No taxable income is generally realized by the Participant upon the grant or exercise of an incentive stock option. If the shares issued to a Participant pursuant to the exercise of an incentive stock option are sold or transferred after two years from the date of grant and after one year from the date of exercise, then generally (i) upon sale of such shares, any amount realized in excess of the option exercise price will be taxed to the Participant as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) neither the Company nor its subsidiaries will be entitled to any deduction for federal income tax purposes; provided that such incentive stock option otherwise meets all of the technical requirements of an incentive stock option. The exercise of an incentive stock option will give rise to an item of tax preference that may result in alternative minimum tax liability for the Participant.
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If the shares acquired upon the exercise of an incentive stock option are disposed of prior to the expiration of the two-year and one-year holding periods described above (a "disqualifying disposition"), generally (i) the Participant will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares at exercise (or, if less, the amount realized on a sale of such Shares) over the option exercise price thereof, and (ii) the Company or a subsidiary will be entitled to deduct such amount. Special rules will apply where all or a portion of the exercise price of the incentive stock option is paid by tendering Shares.
If an incentive stock option is exercised at a time when it no longer qualifies for the tax treatment described above, the option is treated as a nonqualified option. Generally, an incentive stock option will not be eligible for the tax treatment described above if it is exercised more than three months following termination of employment (or one year in the case of termination of employment by reason of disability). In the case of termination of employment by reason of death, the three-month rule does not apply.
Nonqualified Options. No income is generally realized by the Participant at the time a nonqualified option is granted. Generally (i) at exercise, ordinary income is realized by the Participant in an amount equal to the difference between the option exercise price and the fair market value of the Shares on the date of exercise, and either the Company or a subsidiary receives a tax deduction for the same amount, and (ii) at disposition, appreciation or depreciation after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the Shares have been held. Special rules will apply where all or a portion of the exercise price of the nonqualified option is paid by tendering Shares. Upon exercise, the Participant will also be subject to
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, and Other Stock-Based Awards. For all other Awards under the 2024 Plan, either the Company or a subsidiary generally will be entitled to a tax deduction in an amount equal to the ordinary income realized by the Participant at the time the Participant recognizes such income. Participants typically are subject to income tax and recognize such tax at the time that an Award is exercised, vests or becomes non-forfeitable, unless the Award provides for deferred settlement.
A Participant's basis for the determination of gain or loss upon the subsequent disposition of Shares acquired from a stock appreciation right, restricted stock, restricted stock unit, or other stock-based award will be the amount paid for such shares plus any ordinary income recognized when the shares were originally delivered, and the Participant's capital gain holding period for those shares will begin on the day after they are transferred to the Participant.
Parachute Payments. The vesting of any portion of an Award that is accelerated due to the occurrence of a change in control may cause all or a portion of the payments with respect to such accelerated awards to be treated as "parachute payments" as defined in the Code. Any such parachute payments may be non-deductible to either the Company or its subsidiaries, in whole or in part, and may subject the recipient to a non-deductible20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).
Section 409A. The foregoing description assumes that Section 409A of the Code does not apply to an award under the 2024 Plan. In general, stock options and stock appreciation rights are exempt from Section 409A if the exercise price per share is at least equal to the fair market value per share of the underlying stock at the time the option or stock appreciation right was granted. Restricted stock awards are not generally subject to Section 409A. Restricted stock units are subject to Section 409A unless they are settled within 2 ½ months after the end of the later of (i) the end of the Company's fiscal year in which vesting occurs or (ii) the end of the calendar year in which vesting occurs. If an Award is subject to Section 409A and the provisions for the exercise or settlement of that Award do not comply with Section 409A, then the Participant would be required to recognize ordinary income whenever a portion of the award vested (regardless of whether it had been exercised or settled). This amount would also be subject to an additional 20%
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New Plan Benefits
No awards have been granted that are contingent on stockholder approval of the Amendment. The awards that are to be granted to any participant or group of participants are indeterminable at the date of this Proxy Statement because participation and the types of awards that may be granted under the 2024 Plan are subject to the discretion of the Administrator. Consequently, no new plan benefits table is included in this Proxy Statement.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the votes cast at the 2025 Annual Meeting is required to approve the Amendment. An abstention is effectively treated as a vote cast against this proposal.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE ADOPTION OF THE AMENDMENT UNDER THIS PROPOSAL 3.
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OTHER BUSINESS
As of the date of this Proxy Statement, our management has no knowledge of any business that may be presented for consideration at the 2025 Annual Meeting, other than that described above. As to other business, if any, that may properly come before the 2025 Annual Meeting, or any adjournment thereof, it is intended that the Proxy hereby solicited will be voted in respect of such business in accordance with the judgment of the Proxy holders.
HOUSEHOLDING OF MATERIALS
In some instances, only one copy of the proxy materials is being delivered to multiple stockholders sharing an address, unless the Company has received instructions from one or more of the stockholders to continue to deliver multiple copies. The Company will deliver promptly, upon oral or written request, a separate copy of the applicable materials to a stockholder at a shared address to which a single copy was delivered. If you wish to receive a separate copy of the proxy materials you may call the Company at (877) 881-6376, or send a written request to
STOCKHOLDER PROPOSALS FOR 2026 ANNUAL MEETING
If any stockholder wishes to propose a matter for consideration at our 2026 annual meeting of stockholders (the "2026 Annual Meeting"), the proposal should be mailed by certified mail retureceipt requested, to our Corporate Secretary at
In addition, our By-laws permit stockholders to nominate directors and present other business for consideration at our 2026 Annual Meeting. To make a director nomination or present other business for consideration at the Annual Meeting of Stockholders to be held in 2026, you must submit a timely notice in accordance with the procedures described in our By-laws. To be timely, a stockholder's notice shall be delivered to the Corporate Secretary at the principal executive offices of our Company not less than 90 days nor more than 120 days prior to the one-year anniversary of the immediately preceding year's annual meeting of stockholders. Therefore, to be presented at our 2026 Annual Meeting, such a proposal must be received on or after
ADDITIONAL INFORMATION
We are subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and in accordance therewith, we file periodic reports, documents and other information with the
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Appendix A
AMENDMENT NO. 1
TO THE
2024 EQUITY INCENTIVE PLAN
This Amendment No. 1 (this "Amendment") to the Massimo Group Equity Incentive Plan (the "Plan"), is adopted by the Board of Directors (the "Board") of
RECITALS
| A. | The Company currently maintains the Plan. |
| B. | Pursuant to Section 18(a) of the Plan, the Board may amend, alter, suspend, or terminate the Plan. |
| C. | Subject to the approval of the Company's shareholders, the Board believes that it is in the best interests of the Company and its shareholders to amend the Plan to (i) increase the shares subject to the Plan and (ii) extend the term of the Plan. |
AMENDMENT
| 1. | Subject to the approval of the Company's shareholders, effective as of the Amendment Effective Date, the first sentence of Section 4(a) of the Plan is hereby amended in its entirety to read as follows: |
"Subject to the provisions of Section 14, the maximum aggregate number of Shares that may be issued under the Plan is 4,000,000 (the "Plan Share Limit")."
| 2. | Subject to the approval of the Company's shareholders, effective as of the Amendment Effective Date, Section 4(b) of the Plan is hereby amended in its entirety to read as follows: |
"On the first day of each calendar year during the term of the Plan, commencing on
| 3. | Subject to the approval of the Company's shareholders, effective as of the Amendment Effective Date, Section 24 of the Plan is hereby amended in its entirety to read as follows: |
"(a) The Plan shall be effective as of ________________, 2025, the date on which the Plan, as amended by Amendment No. 1 to the Plan, was adopted by the Board (the "Effective Date").
(b) Unless terminated earlier under Section 18, this Plan shall terminate on _________, 2035, ten years after the Effective Date."
This Amendment shall be and, as of the Amendment Effective Date, is hereby incorporated in and forms a part of the Plan, subject to the approval of the Company's shareholders. Unless and until the Company's stockholders approve this Amendment, this Amendment shall be of no force or effect.
Except as specifically set forth in this Amendment, there are no other amendments to the Plan, and the Plan shall remain in full force and effect.
Attachments
Disclaimer
Proxy Statement (Form DEF 14A)
Proxy Statement (Form DEF 14A)
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